Fiduciary financial advisor in St. Louis. For St. Louis residents who don't have the time, knowledge, or interest to manage their investments and retirement accounts themselves, working with a financial advisor offers peace of mind and assurance that their long-term interests are protected and their hard-earned money is growing. Trust is paramount in that relationship, and whether you're planning for retirement, seeking to grow your wealth, or ensuring a secure financial future for your family, the knowledge, skill, and integrity of your financial advisor matter greatly. By choosing a fiduciary financial advisor in St. Louis, MO, you'll have a partner who is legally and ethically bound to put your own best interests first.
At Correct Capital Wealth Management, our St. Louis fiduciary financial advisors will never recommend a product, investment, or strategy that we don't genuinely believe in ourselves. For financial advisors that adhere to the fiduciary standard and act with your best interest at heart, call Correct Capital today at 877-930-4015, contact us online, or schedule an appointment with a member of our advisor team.
What Is a Fiduciary?
A fiduciary is a person or entity that holds a position of trust and responsibility when managing or handling assets, finances, or legal matters on behalf of someone else. Fiduciaries are legally and ethically bound to act in the best interests of the person or entity they are serving, often referred to as their "principal" or "beneficiary." This duty of loyalty and duty of care is known as the fiduciary standard.
Common examples of fiduciaries include:
- Trustees — Individuals or institutions responsible for managing and overseeing assets held in a trust for the benefit of beneficiaries.
- Executors — Individuals appointed to manage the estate and assets of a deceased person according to their will or the law.
- Financial advisors — Professionals who provide financial advice and manage investments for clients, with an obligation to prioritize the client's financial well-being.
- Corporate directors — Members of a company's board of directors who are entrusted with making decisions in the best interests of the shareholders.
- Guardians — Individuals appointed by the court to make decisions on behalf of minors or individuals who are unable to make decisions for themselves.
- Attorneys — Lawyers who are bound by a fiduciary duty to act in the best interests of their clients when handling legal matters.
- Real estate agents — Professionals who assist clients in buying, selling, or renting properties and are expected to act in the best interests of their clients in real estate transactions.
Good Faith, Duty of Loyalty, and Duty of Care
There are three important aspects to understanding a fiduciary duty:
1. Good Faith
Fiduciaries are required to act in "good faith," which means they deal with their beneficiaries honestly, with sincerity, and without any intention to deceive or harm the interests of their beneficiaries. They must always act honestly and with the best interests of the beneficiary in mind.
2. Duty of Loyalty
Fiduciaries owe a "duty of loyalty" to the client / beneficiary, which means they must prioritize the beneficiary's interests above their own. They should avoid any conflicts of interest that could compromise their ability to act solely in the beneficiary's best interests. If they're unable to avoid a conflict of interest, they must disclose it to their client / beneficiary and still act in the beneficiary's interest above their own.
3. Duty of Care
Fiduciaries have a "duty of care" to exercise the level of care, skill, and diligence that a prudent person would use in similar circumstances. They must make informed and thoughtful decisions when managing assets or making decisions on behalf of the client / beneficiary. This duty ensures that they do their best to protect and grow the assets under their care while minimizing risks.
What Is a Fiduciary Financial Advisor in St. Louis?
Financial advisors in St. Louis help individuals, families, and business owners achieve their life goals through a variety of financial services and recommendations. These services include investment strategies, retirement planning, tax planning, estate planning, portfolio management and more.
Anyone in St. Louis can call themselves a "financial advisor," but to be a fiduciary, an advisor must be registered with the SEC, and is legally required to abide by fiduciary duty, and as a result, must put clients’ interests ahead of their own. They have to have accreditations and certifications from industry organizations such as the CFP Board and Fi360. Obtaining and keeping these certifications require continuous education and a strict moral standard.
For example, fiduciary financial advisors with a CERTIFIED FINANCIAL PLANNER™ certification must follow the CFP Board's Code of Ethics and Standards of Conduct to:
- Act with honesty, integrity, competence, and diligence
- Act in the client’s best interests
- Exercise due care
- Avoid or disclose and manage conflicts of interest
- Maintain the confidentiality and protect the privacy of client information
- Act in a manner that reflects positively on the financial planning profession and CFP® certification
Are All Financial Advisors in St. Louis Fiduciaries?
Not all financial advisors in St. Louis are fiduciaries. The key reason is that financial advisors can operate under different regulatory frameworks and compensation structures, leading to varying standards of care:
- Regulatory framework — Financial advisors can be subject to different regulatory frameworks depending on their business model. For instance, Registered Investment Advisors (RIAs) are typically fiduciaries. In contrast, some advisors operate under the suitability standard, which requires recommendations to be suitable for clients but does not mandate the same level of fiduciary duty.
- Compensation structure — The way financial advisors are compensated can influence their fiduciary status. Fiduciary advisors often charge a percentage fee for their services, making their compensation transparent and reducing conflicts of interest. Non-fiduciary advisors may receive commissions or other forms of compensation tied to product sales, which means they may make recommendations that are more in their interest than yours.
The Prudent-Person Rule
Fiduciary financial advisors must abide by the Prudent-Person Rule, also known as the prudent investor rule. The rule acknowledges that financial advisors can't predict the future or know which investments will be profitable with 100% certainty, but stipulates that a fiduciary financial advisor purchase investments that a reasonable person would purchase from an acceptable risk based on the clients goals and investment objective.
The prudent person rule originates in common law, and was eventually unified with the Uniform Prudent Investor Act. Each state can apply their own specific laws. Missouri law, for example, stipulates that fiduciary financial advisors must consider:
- General economic conditions
- Possible inflation or deflation
- Expected tax consequences of investments
- The role that each investment or course of action plays within your portfolio
- Expected return and appreciation of capital
- Other assets and resources you have
- Your needs for liquidity, income, and preservation of capital
- An asset's special relationship or value to you, if any
- The size and nature of your portfolio, its distribution requirements, and the estimated duration of your relationship with the fiduciary financial advisor
Fiduciary Duty vs. Suitability Standard: What’s the Difference?
Advisors who work under the "suitability standard" are only required to to recommend investments or products that align with your goals, while advisors with a fiduciary duty must act in your best interest. Here are some key differences:
Fiduciary Duty
- Legal and Ethical Obligation: Fiduciary financial advisors are legally and ethically bound to act in their clients' best interests at all times.
- Best Interest: Advisors must prioritize the client's financial well-being over their own profit.
- Comprehensive Care: They must disclose all conflicts of interest, ensure transparency, and provide the highest standard of care in their recommendations and actions.
- Regulation: Governed by the Investment Advisers Act of 1940, which mandates that investment advisors have a fiduciary duty to their clients.
- Examples: Registered Investment Advisors (RIAs) and CERTIFIED FINANCIAL PLANNER™ professionals.
Suitability Standard
- Appropriateness: Advisors only need to ensure that their recommendations are suitable for the client’s financial needs and objectives at the time of the transaction.
- Lower Standard of Care: Advisors can consider their own interests as long as the recommendations are suitable.
- Potential Conflicts: Advisors may earn commissions from the sale of financial products, which can create conflicts of interest.
- Regulation: Governed by the Financial Industry Regulatory Authority (FINRA), which requires a “reasonable basis” that an investment is suitable for the client.
- Examples: Some broker-dealers and insurance agents.
Best Interest vs. Reasonable Basis
The Investment Advisers Act of 1940 stipulates that fiduciary advisors must act in their clients "best interest," while FINRA Rule 2111 mandates that dealer-brokers and other non-fiduciaries simply have a "reasonable basis" for their recommendations. Here's a breakdown of what those terms mean in relation to dealing with a client's investments and financial planning:
| Best Interest | Reasonable Belief | |
|---|---|---|
| Definition | Requires advisors to act in the client's optimal financial interest. | Requires advisors to recommend suitable products or strategies based on available information. |
| Standard of Care | Higher level of care ensuring every action aligns with the client's best outcome. | Ensures recommendations are appropriate and make sense for the client's situation. |
| Client-Centric Approach | Advisors prioritize client's goals, needs, and preferences above their own. | Advisors base recommendations on the client's disclosed financial situation, objectives, and risk tolerance. |
| Transparency | Full disclosure of potential conflicts of interest is required. | Less stringent disclosure requirements, provided the recommendation is suitable. |
| Due Diligence | Recommendations based on a comprehensive evaluation of the client's financial situation. | Recommendations based on reasonable research and analysis. |
| Ongoing Duty | Continuous duty to act in the client's best interest, requiring regular reviews and updates. | Emphasizes the appropriateness of advice at the time of the recommendation, with less focus on ongoing oversight. |
| Conflict of Interest | Must disclose and manage conflicts transparently, ensuring clients are aware of potential biases. | Conflicts are less strictly regulated, as long as the recommendation remains suitable. |
| Long-Term Commitment | Advisors have a continuous obligation to monitor and adjust the client's financial plan. | Periodic reviews are recommended, but the focus is on the suitability of initial recommendations. |
Benefits of Working with a Fiduciary Financial Advisor in St. Louis
Choosing to work with a fiduciary financial advisor in St. Louis comes with a host of advantages that can significantly impact your financial well-being:
- Fiduciary financial advisers must act in your best interest and maintain professional standards
- Full disclosure of relevant materials and facts and full transparency with issues like risks, fees, and potential conflicts of interest, allowing you to make the best decisions for you and your St. Louis family
- Make investments on your behalf by leveraging their expertise to create and manage a diversified portfolio that aligns with your financial goals and risk tolerance
- Comprehensive financial planning and a holistic approach to your financial well-being, considering all aspects of your financial life to create a personalized approach
- Ongoing monitoring and guidance to ensure your financial strategies and investments remain on track and that you can adapt to any curveballs the market or life throws your way
- Minimized risk with prudent and responsible investment choices made by carefully assessing the risk associated with each investment and tailoring your portfolio to match your risk tolerance
- Peace of mind that your best interests are being watched over by experienced financial professionals
- A long-term relationship with a fiduciary financial advisor that understands your financial goals evolve over time, and life circumstances change
What Financial Planning Services Do Fiduciary Advisors Offer?
At Correct Capital Wealth Management, our comprehensive financial planning services are designed to provide you with a holistic approach to achieving your financial goals. Our team of fiduciary financial advisors in St. Louis works diligently to understand your unique financial situation and tailor strategies that align with your life aspirations.
Personalized Financial Roadmap
We begin by conducting a thorough analysis of your current financial status, including income, expenses, assets, and liabilities. This helps us create a personalized financial roadmap that addresses your short-term needs and long-term objectives.
Financial Portfolio Management
We craft personalized strategies to diversify your portfolio, balancing your risk tolerance with your time horizon. Our team continuously monitors and adjusts your investments to align with your financial goals, ensuring that your portfolio remains robust and adaptable to changing market conditions.
Retirement Planning
Planning for retirement is a cornerstone of our comprehensive financial planning. We help you navigate the complexities of retirement accounts, social security benefits, and income strategies to ensure you can retire comfortably and securely.
Tax Planning
Effective tax planning helps keep more of your hard-earned money with yourself and your family. Our advisors are well-versed in tax laws and strategies that can reduce your tax liability and enhance your overall financial health.
Estate Planning
We also provide educated guidance on estate planning to help you protect your legacy. From wills and trusts to estate tax strategies, we ensure your assets are distributed according to your wishes while minimizing tax burdens.
Ongoing Monitoring and Adjustments
Financial planning is not a one-time event but a continuous process. We offer ongoing monitoring and regular reviews to adapt your financial plan to any changes in your life circumstances or economic environment.
Client-Centric Approach
At Correct Capital, our approach is deeply client-centric. We pride ourselves on building long-lasting relationships based on trust, transparency, and personalized service. Your financial well-being is our top priority, and we are committed to helping you achieve your financial goals with integrity and excellence.
Hire Correct Capital as Your St. Louis Fiduciary Financial Advisor
Choosing a financial advisor in St. Louis with a fiduciary standard is crucial to ensure your long-term interests stay protected. At Correct Capital Wealth Management, we are proud to be fiduciary financial advisors who prioritize the financial success and peace of mind of St. Louis individuals and business owners alike. Our team includes CERTIFIED FINANCIAL PLANNER™ (CFP®) professionals and we are a Registered Investment Advisor (RIA) with the expertise and qualifications needed to guide you on your financial journey. We offer all our clients our I.O.U promise: all of our advice will be independent, objective, and unbiased.
Call us today at 877-930-4015 or contact us online to schedule an appointment and learn more about how we can help you achieve your financial goals in St. Louis.
